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The state pension is being reformed from April 2016 into a single-tier pension – the ‘new state pension’ – for future pensioners. The introduction of the new state pension means that there will no longer be an additional state pension from which to contract-out. Consequently, contracting-out and the NI rebate will come to an end on 6 April 2016.

The Occupational Pension Schemes (Power to Amend Schemes to Reflect Abolition of Contracting-out) Regulations 2015 set out the detail to enable employers that sponsor a salary-related occupational pension scheme to amend their scheme rules, in order to mitigate for the increase in national insurance. 

Article by ACCA In Practice